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Millennials and Gen Z embrace 'multi-banking' with several accounts

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Credit cards and debit cards. Photo: REUTERS/Catherine Benson CRB

Millennials have a reputation for being low on loyalty when it comes to their employers — and it seems they are the same when it comes to their banks.

Under 25s are opening multiple bank accounts and leaving old ones open, according to new research, a habit not found in older generations.

The Current Account Switch Service said on Thursday that a survey of 2,300 people found that 37% of millennials and Gen Zs are “choosing to multi-bank.” That compares with just 17% of over 35s.

The findings support what many observers of challenger banks have long suspected: that young people are opening accounts with buzzy startups like Monzo and Starling but keep their salary going into a main account held with a legacy bank. Only around 30% of Monzo’s customers deposit at least £1,000 in their accounts each month, although that figure was up from 13% last year.

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The Current Account Switch Service’s survey was released alongside new figures on account switching in the UK. 227,754 people switched accounts in the third quarter of the year, meaning the Current Account Switching Service has now switched over 6 million accounts since it was set up in 2013.

Nationwide was the biggest winner in the third quarter of 2016, with net gains of 26,466 in the three month period. HSBC (HSBA.L) was second with 15,782 net new accounts. Monzo and Starling, two digital-only challenger banks set up around 5 years ago, were fourth and fifth for net new openings in the quarter.

Halifax was the biggest loser in the third quarter, losing 12,058 accounts. Barclays (BARC.L) and RBS (RBS.L) both lost just over 10,000 accounts in the quarter.

Matthew Hunt, COO of Pay.UK, which owns and operates the Current Account Switch Service, said: “There are still plenty of people who could be taking advantage of the opportunities associated with switching, particularly amongst the young and those considered financially vulnerable.”

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